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Wednesday, January 19, 2011

California man pleads guilty to attempted military exports to Iran, Russia

By Antonio Prado
Community News
Wilmington, Del. — A California man pled guilty to attempting to illegally export an F5 fighter jet, two F-14 ejection seats, rescue radios and other military supplies to Iran and Russia with Wilmington slated as the stopgap destination for the jet.

Marc Knapp, 35, of Simi Valley, Calif., pled guilty to a two-count felony and faces a maximum sentence of 30 years in prison followed by three years supervised release and a $2 million fine. U.S. Attorney for Delaware Charles M. Oberly III announced Knapp’s guilty plea flanked by officials from the U.S. Department of Homeland Security Investigations and U.S. Immigration and Customs Enforcement at the U.S. Department of Justice District of Delaware office in Wilmington.

Knapp also pleaded guilty to illegally exporting three anti-gravity flight suits to Hungary.

Why did Knapp do it?

“He did this to make an easy buck,” said Edward T. Bradley, special agent in charge of Defense Criminal Investigative Service (DCIS), Northeast Field Office.

But the price would have been too high for the security of the United States, said Andrew M. McLees, acting special agent in charge of the U.S. Immigration and Customs Enforcement (ICE) Office of Investigations in Philadelphia.

“The United States produces some of the most advanced technology in the world,” McLees said. “As such, some of that technology is the target of criminals and rogue nations. We will not allow the security of the United States to be compromised.”

On July 9, 2010, Knapp sent a contract for the F-5 fighter jet to the agent via U.S. mail, according to U.S. Department of Justice documentation. The contract set forth the timing for flying the F-5 to Delaware once the agent wired $3.25 million into an account specified by Knapp. Knapp indicated his commission would be $500,000, “with 50 percent paid on the date of arrival and landing of the aircraft at the DE (New Castle) or other agreed airport, and 50 percent paid at the time of arrival at destination.”

On July 20, 2010, Knapp met with the Homeland Security agent in Wilmington. He brought rescue radios that the agent agreed to purchase for $11,000. The agent told Knapp the customer was Russian. Knapp replied, “Awesome. Whoever your customer is, I’m happy with.”

Then, he signed a contract to send the F-5 fighter jet to Iran, and was provided with power of attorney to export the jet, according to federal documents. He said he would use a false name to ship the fighter jet as a "Museum Display Shell." After the meeting, federal agents placed him under arrest.

The first count levied against Knapp was for a violation of the International Emergency Economic Powers Act, the statute within U.S. Code that makes it a crime to export to embargoed nations like Iran, Assistant U.S. Attorney for Delaware David L. Hall said. The second count was for violating the Arms Export Control Act of U.S. Code, which makes it a crime to export without a munitions license.

“The export of technology to Iran is controlled so that it cannot be used to harm America or its allies,” said John P. Kelleghan, special agent in charge of HSI in Philadelphia.

In addition to Iran and Russia, Knapp also expressed an interest in selling items to China, officials said.

Officials declined to discuss where Knapp had purchased the military equipment, including the rumor that he had bought them on EBay.

“There are lot of components that can be lawfully purchased,” Hall said. "They’re not contraband. The radios [however] are controlled items. If in fact he bought them on EBay, that does not imply that they’re lawfully owned and lawfully possessed and sold.”

Several questions arose about Knapp’s connection to Wilmington. A cooperating defendant, who was involved in a previous case investigated by the U.S. Department of Justice’s District of Delaware, assisted in this investigation, Hall said. That defendant, Paul Taylor, introduced Knapp to an undercover Homeland Security Investigations special agent, who met with Knapp several times at locations in California, Pennsylvania, Delaware and Budapest, Hungary between December 2009 and July 2010, Hall said. Taylor had been charged with a violation of Arms Export Act for the exportation of the F-14 ejection seat. Knapp had supplied Taylor with the ejection seat, he said.

Knapp then attempted to export a second ejection seat and the F-5 aircraft, Hall said.

Hall declined to elaborate how they came across Taylor, who also hails from California.

“This office, along with DCIS and HSI, has an ongoing investigation of these offenses, which we’ve been conducting for some number of years," Hall said. "These are two of the targets and two of the defendants that have resulted from that investigation.

“This was where the investigation was conducted and the events that occurred in Delaware were the final medium and, ultimately, his intention to deliver the aircraft to Delaware,” Hall said. "He was arrested in Wilmington."

Hall and fellow Assistant U.S. Attorney Robert F. Kravetz are prosecuting the case. Knapp is custody, and he is scheduled to be sentenced May 23.

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